Can legal project management succeed in the unpredictable world of litigation and transactions?

In mid-2013, it’s fair to say that we have now arrived in a world in which legal project management (LPM) is here to stay. In a recent survey by American Lawyer Media, fully 51 percent of managing partners, attorneys and top staff at major law firms said their firm was employing LPM in some manner. As recently as 2008, that number would have been much smaller. Project management just wasn’t on the radar screen of the legal industry, but it is now.

It’s clear that for a number of reasons that stem largely from client demands for greater predictability, accountability and transparency around the cost of legal services, major law firms are now embracing LPM, whether they want to or not. The demand has come, of course, from corporations and their in-house legal departments, many of which already employ LPM in their operations.

A major question about LPM has, however, arisen lately, one whose answer may determine whether the project management trend that has been sweeping the legal world will continue in full force or will stall.

That question or objection is: how can the techniques of project management, honed over the years as a way of keeping costs under control for construction companies that build office towers, be applied to the wild and woolly worlds of major corporate litigation and of corporate transactions? It’s quite clear that repetitive pieces of legal work, such as routine purchases or leases of real estate, or automobile accident cases, can be systematized and subjected to fairly precise budgeting, but what about major, complex matters?

High-stakes corporate-commercial litigation and complicated deals, it is argued, are too unpredictable to be subjected to the advance budgeting and constant re-evaluation that are the mainstays of LPM.

In the litigation context, there is always going to be that unanticipated set of documents, that unexpected witness, that judge who goes off on some minor issue, that unexpected court delay and myriad legal issues that weren’t foreseen when the case was filed. One can’t control what the other side plans to do, it is said. The adversary can raise seemingly endless objections and counterclaims and can even engage in classic stall tactics. And the unpredictability increases as the number of parties and claims increases, especially for class actions, mass torts and other aggregated cases.

In the deal world, it is a similar situation. The other side in a negotiation will have its own internal deadlines, its own incentives and its own needs that the deal is supposed to fulfill. In addition, transactional lawyers say it is too difficult to track their time for budgeting purposes since there's no established set of phase/task codes for corporate deals, as there are for litigated matters.

Every piece of litigation and every transaction is therefore unique, some say – so the concepts of LPM don’t work very well. As law firm consultant Pam Woldow has written, summarizing the objection, this is an “unpredictability defense” that “asserts that it is nearly impossible to precisely plan and completely control legal spend because legal matters are subject to such a plethora of unforeseeable variables, risks and unexpected events.”

But this places corporate legal officers in an untenable situation. In today’s post-recession business world, certainty and predictability of costs are even more necessary than ever for the success of both private and public companies. As leading consultant Timothy B. Corcoran has argued, the worst crime for a general counsel is not the development of an advance estimate of the company’s costs that is too high or too low. It is an estimate that leaves too much room for surprise, robbing the company of the predictability that it needs to make rational decisions for the future. So if so much is unpredictable, how can in-house counsel effectively manage the legal department’s budget, as counsel is increasingly expected to do? That is what we will discuss in next month’s article.